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Reliance impatient for MA field development approval

Vol 11, PW 19 (07 Feb 08) People & Policy

This will sound bizarre even to those familiar with miles of red tape usually encountered when dealing with Indiaâ€™s oil ministry.

For the past five months, bureaucrats have been sitting on Relianceâ€™s Field Development Plan (FDP) for the MA oilfield at deepwater discovery block KG-DWN-98/2 - home to the D6 gasfield. This lethargy is all the more lamentable given that in three months from now MA will join the small list of major oilfields in India, alongside the Mumbai High, Ravva, Neelam and others: by the year-end MA should be adding at least 40,000 b/d to national production.

Any delay in approval of the development programme on the part of the oil ministry would be negligent, to say the least. Reliance submitted a $1.9bn FDP for MA to the DGH last August, but this is still awaiting approval.

Under the PSC, the terms are clear: Reliance canâ€™t begin development unless the government approves the FDP. â€œIn the last few months there has been administrative paralysis within the oil ministry,â€‌ reports a source.

â€œThe first draft of the MA oilfield development plan was submitted more than a year ago. The final development plan is not even a brand new document.

Everybody knows the details.â€‌ Efforts by Reliance to convene a Management Committee (MC) meeting to approve the FDP have proved equally fruitless.

â€œMeetings were scheduled on three separate occasions in December,â€‌ we hear. â€œBut they were postponed by the ministry each time.

â€‌ Alive to the need for speed, DGH officials are on standby to make a presentation about MA to ministry officials. â€œThe DGH was ready and two dates were set between December and January,â€‌ we hear.

â€œBut each time the ministry asked for a postponement.â€‌ Expect more delay with NELP-VII underway: important decisions are pending because oil minister Murli Deora, secretary MS Srinivasan and joint secretary exploration AK Jain are in and out of the country, leaving additional secretary S.

Sundareshan in charge. Sadly for Reliance, and others with important matters pending, Sundareshan prefers to leave important decisions to the ministry trio of Deora, Srinivasan and Jain.

Observers are puzzled by the ministry’s treatment of a powerful company like Reliance, unused to delay like this. Some blame it on petty but debilitating “ego clashes” between ministry bureaucrats and the DGH – interesting, but difficult to prove. Meanwhile, Deora, Srinivasan and Jain returned to work on (Monday) February 4 from the NELP-VII roadshow in Calgary. But don’t expect any progress on the FDP for MA till after February 15, because they’ll be off again from February 11 to 14 for the Singapore and Perth roadshows.

Observers are puzzled by the ministry’s treatment of a powerful company like Reliance, unused to delay like this. Some blame it on petty but debilitating “ego clashes” between ministry bureaucrats and the DGH – interesting, but difficult to prove. Meanwhile, Deora, Srinivasan and Jain returned to work on (Monday) February 4 from the NELP-VII roadshow in Calgary. But don’t expect any progress on the FDP for MA till after February 15, because they’ll be off again from February 11 to 14 for the Singapore and Perth roadshows.